Apple faced challenges in its key Greater China region at the start of 2024, a trend that persisted throughout the year. Analysts described sales of the iPhone 15 in China as lackluster, with competitors like Huawei and Xiaomi intensifying their presence in the local smartphone market. This was reflected in Apple’s 2024 earnings, where despite surpassing revenue estimates in the fourth quarter, sales in China declined year over year. However, Apple’s CEO Tim Cook highlighted some positive signs in the region during the fiscal Q4 earnings call on October 31. Cook made multiple trips to China in the year, underscoring concerns about potential tariffs impacting the country that manufactures a significant portion of Apple’s products.
In February, Apple launched its inaugural headset, the Vision Pro, priced at $3,500, marking one of its most expensive offerings to date. The device received mixed reactions, with uncertainty surrounding its target audience—whether gamers or professionals. Cook later emphasized that the Vision Pro was for tech enthusiasts seeking cutting-edge innovations.
Apple faced a legal challenge in March when the US Department of Justice accused the company of maintaining an unlawful monopoly in the smartphone market. Apple refuted the allegations and sought to dismiss the lawsuit, citing speculative claims. The decision on whether the case will go to trial rests with US District Court Judge Julien Xavier Neals, expected as early as January.
In Europe, Apple encountered regulatory issues, including a sizable fine related to its App Store and competition concerns. Despite these challenges, Apple introduced new iPad models in May, including the first iPad Pro models featuring OLED displays. The launch was well-received, contributing to strong iPad performance in the third quarter of 2024.
At the Worldwide Developers Conference in June, Apple unveiled Apple Intelligence, marking its official entry into the AI landscape. This move was seen as a significant development in the ongoing AI competition, following the advancements by other tech giants like OpenAI and Google.
The excitement surrounding Apple Intelligence was immediate, according to Dan Ives, global head of technology research at Wedbush Securities. He predicted that it would lead to a “golden upgrade cycle” for iPhones. Despite the anticipation, Apple noted that Apple Intelligence would be a significant component of the iOS 18 software update, albeit restricted to iPhone 15 Pro models and newer. The company set high expectations during WWDC, promising to fulfill them following the initial release in October, with continued updates planned through 2025. While not all features have been rolled out as initially advertised, U.S. iPhone users have gained access to tools like “Writing Tools,” AI-generated emojis, and ChatGPT through Siri. Although Apple was criticized for joining the AI arena later than its competitors, analyst Munster stated that the company managed to catch up by forming partnerships and integrating AI into its unique ecosystem.
Reports suggest that Apple is exploring ways to introduce Apple Intelligence to Chinese iPhone users, a crucial international market for the company. To accomplish this, Apple would need to collaborate with a local entity. The debut of the first AI-equipped iPhone, the iPhone 16 Pro, was met with anticipation. Apple unveiled the device at its “Glowtime” event in September, emphasizing that it was designed from scratch to leverage Apple Intelligence capabilities. The release aimed to revitalize iPhone sales, which had been sluggish leading up to the launch. Despite launching without Apple Intelligence, the feature was later made available through an iOS update. The iPhone 16 Pro and Pro Max models were priced starting at $999 and $1,199, respectively. Although the anticipated golden upgrade cycle has not materialized yet, analysts remain optimistic about the future of Apple’s iPhone lineup.
In addition to new product launches in 2024, Apple made the decision to discontinue certain projects that were previously in development. Reports indicated that Apple abandoned plans for a subscription service designed for iPhones, reallocating the team responsible for this initiative to other projects. The tech giant also phased out its buy now, pay later service, Apple Pay Later, opting to partner with Klarna to integrate similar features into Apple Pay. Further restructuring efforts included downsizing the workforce dedicated to screen-related projects and the electric car initiative, affecting over 600 and 2,000 employees, respectively. Despite these setbacks, canceling the Apple Car project allowed Apple to reallocate resources to accelerate progress in the realm of Apple Intelligence, which Munster described as a strategic move to advance the company’s AI capabilities.
The evolving landscape of Apple’s product development and strategic decisions underscores the dynamic nature of the tech industry. As Apple continues to innovate and adapt to market trends, its focus on AI integration and consumer experience remains paramount. The company’s ability to pivot and realign resources demonstrates a commitment to staying at the forefront of technological advancements. Amidst challenges and adjustments, Apple’s dedication to enhancing its product offerings and delivering cutting-edge technology sets the stage for continued growth and innovation in the years to come.
